Why do so many people fear freedom and free enterprise? (Part 1)

Voltaire

Since I write about capitalism and crony capitalism and government and business every day I have the opportunity to read quite a lot about these subjects from various perspectives. I read libertarians, and conservatives, and liberals, and progressives, and just about anyone else who is interesting. I read the comments here at ACC, and at sites all over the web.

One of the things I am fascinated by is the degree to which some people are seriously afraid of free enterprise, the voluntary exchange of goods and services, of capitalism. It is bizarre to me as it seems pretty self evident that where free enterprise is allowed to flourish people also flourish. History has shown us this over and over and over. And yet people still fear.

Is it ignorance? Is it ingrained lessons from school? Is it an overall culture of statism? Is it the search for a religion in a world which often lacks religion? (I am convinced that “big government” is in fact a religion. I will admit this from the outset.) 

There are probably dozens if not hundreds of reasons why some people fear free enterprise. Some reasons are more valid than others. I think however that there are some core reasons which can be readily identified and I’d like to take the space to explore some of them.

This essay will be an ongoing one which I will revisit periodically. Below are a few reasons why I believe people fear freedom and free enterprise. This is just the first batch.

 

The fear created by perceived (and sometimes real) powerlessness

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A sense of powerlessness induces fear. If one feels that one is simply being swept along by the economy, with no ability to determine direction, with no ability to steer one’s life, one is going to look for solutions. As such many people who feel tossed around and out of control look to the government as a stabilizing force. That the government has often created the raging river they are trapped in is not readily apparent nor does it matter much when one thinks that one is drowning. (And one may be.) One is going to reach for whatever solution one can. Politicians, who know the power of relieving pain, are always there to “help.” Vote for me and I’ll tame the raging waters. I’ll throw you a life preserver. The flailing flood “victim” grabs whatever he or she can get.

 

The fear that markets are “unfair.”

It is true that free markets do not distribute wealth uniformly. That in a system of voluntary exchange some will be better at deriving value from such exchanges than others.

Some people for instance absolutely hate to haggle over the price of a car or a house. It makes them uncomfortable. So when someone who is better at haggling, who is more comfortable (or overcomes their discomfort to a greater extent) with haggling, who enters  the dealership better informed etc. gets a better price than the people who don’t want to haggle, the non-hagglers may think that an injustice has been done. Why don’t the people who don’t want to haggle get the same price as the person who was good at haggling? That isn’t fair. We should all get the same price.

Thing is the person who haggled paid for their discount. They entered the fray, overcame their discomfort, researched the purchase, so that they were able to extract the lower price from the dealer. They earned the cheaper car payment.

Still, many see this difference in price as unfair.

 

The fear of perceived and real privilege

There is such a thing as institutionalized privilege. But what many people who are most concerned about countering this privilege (often people who come from privileged backgrounds by the way) fail to understand, tragically, is that free markets offer the best way to counter such privilege.

When people can gather capital over time, without the government or a mafia stealing their earnings, wealth can be created. Work, ingenuity, insight, just plain hustle can be converted into a living. Then from a living perhaps into a nest egg. Then, if invested with a keen eye perhaps that nest egg can become a fortune.

It is true that some people are just born with fortunes. (Not very many people but some.) But in a free market/free price system this can be a good thing. This is capital which can then be invested into various enterprises. Traditionally some of this money often – in America anyway – finds its way into the charitable sector where it does much good. This is not appreciated as much as it should be.

Regardless, unless one is talking about a full on Maoist redistribution of wealth (with the ensuing death and ultimate grinding poverty and moral deprivation) it is always the people of “privilege” who end up running a large government apparatus. This is almost without exception around the world. A large government further entrenches the “privileged” who now have official control over the levers of power.

If you want to make sure that the families which occupy an aristocracy stay there generation after generation, institute a heavy handed government. Free markets threaten the status of such people. Free markets allow for the emergence of new power centers. As such the “privileged” have often argued against free markets. (Kings historically have not been big fans of free enterprise and capitalism.)

One does not see capitalism defended in this country’s most elite universities for instance. At the universities of the particularly privileged, almost universally there is a refrain of statism which comes out of the halls of economics and poli sci departments. Why? Do you think that these folks are suicidal? Of course not. Big government is to the advantage of the “privileged.

 

The fear of competition

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This is not completely different from the tendency to think that markets are unfair.

Some people don’t believe that trophies should be awarded. That when someone rises above the crowd in sports or business  or whatever this shouldn’t be celebrated. Such celebration exacerbates the inherent inequalities in any endeavor. Better to give participation ribbons to everyone than to risk hurting the feelings of anyone. (Other than the winner of course.)

Better to have a broadly egalitarian society within which everyone lives their life in a shade beige than to suffer the inequities of a rainbow. Even if free markets facilitate beautiful hues the beige the state can impose is better because everyone is the same. (For some reason.)

 

Part 2 next week.